Some words to the wise on our debt – The Dallas Morning News
by William McKenzie
February 01, 2010
Source: The Dallas Morning News
David Walker is not your typical holy roller. Bald, bespectacled baby boomers don't make passionate preachers. Nothin' agin' 'em; I'm a bald, bespectacled baby boomer, myself. We don't bring the house down.
Walker can, though, and he was in Dallas on Friday at a National Center for Policy Analysis lunch. With Ross Perot leading a standing ovation, America's former comptroller general drew from his best-selling book, Comeback America: Turning the Country Around and Restoring Fiscal Responsibility, to remind us how dire our deficit and debt picture has become.
As comptroller general, he saw the ins and outs of that picture because he had to audit the financial statements of the Office of Management and Budget and the secretary of the treasury. Now, as head of the Peter G. Peterson Foundation, this 58-year-old accountant is on a mission to warn Americans that we must deal with this picture soon or suffer.
Here's one that that should get our attention. It particularly should wake up the 35-and-unders, whose future is at stake. Writes Walker:
"Right now, on average, Americans pay about 21 percent of their income in federal taxes and another 10 percent to state and local governments. By 2030, to pay our rising bills, that amount could be at least 45 percent - higher even than the average 42 percent that most Europeans pay. By 2040, it would be at least 53 percent and climbing."
And here's how he describes those who'll foot the bill:
"So much of their money will be devoted to keeping the government afloat that they'll have relatively little for everything else in life. Their homes will be smaller and drabber. There will be less to spend for cars, vacations, dinners out and big TV sets, all of which their parents took for granted. They'll still read about the consumer society and conspicuous consumption, but mainly in history texts."
What I like is that he's not just selling hellfire and brimstone. He's also offering ideas to get out of this mess, which would dwarf our current economic problems.
For example, he'd reform Social Security by gradually increasing the retirement age, modestly changing cost-of-living payments and raising the cap on income subject to payroll taxes.
Those are sensible ideas, especially on the retirement age. Americans clearly are living longer. These proposals also avoid the pitfalls about whether Congress should let taxpayers invest a small portion of their Social Security contributions in the stock market.
On taxes, he acknowledges they must rise to reduce the debt. But he also believes that simplifying the tax code and keeping marginal tax rates low could minimize the hikes. And he presents ways to cut spending.
On health care, he critiques Washington for expanding coverage before proving it can control costs. No argument there. Congress should concentrate more on the latter before passing a bill.
Fortunately, some are picking up on the seriousness of the debt, which is nearing $60 trillion when you factor in unfunded promises to Social Security and Medicare. Although his new budget expands the deficit, President Barack Obama wants a presidential commission to tackle the larger debt. And he would have Congress freeze some parts of the domestic budget for three years. Give him credit for stepping up on an issue he really hasn't owned.
Sadly, that's not so about all in Washington. Forty-six senators, including Republicans Kay Bailey Hutchison of Texas and John McCain of Arizona, recently killed a Senate bill to deal with the debt. Have they not read the newspapers? Do they not think the stock market wants some signal that Washington takes the debt seriously?
Walker is a big fan of George H.W. Bush and Bill Clinton for breaking campaign promises to curb the deficit. Their decisions cost them, especially Bush's to raise taxes. He probably lost his presidency over it, but he helped Americans stem the flow of red ink.
We need more leaders like that now. David Walker can preach the word, but somebody must make tough calls. Soon.